- It appears that the spat between the United States and China is far from over after Chinese leaders have decided to put massive restrictions on exports are rare earth minerals out of that country, and the United States has decided that they will be retaliating one way or the other.
- Because of this, the nonsense about the trade war has taken front and center stage again, and it’s likely that there are concerns about how the Chinese may punish Tesla, but at the end of the day we are still in the consolidation area and as we head into the weekend, it’s very difficult to grasp on what may or may not happen here. After all, this is a market that panics first and thanks later.
Technical Analysis
This does look like a market that is starting to struggle a bit, and the close on Friday will be crucial, because it could give us a bit of a “heads up” as to which direction we actually want to go. Ultimately, this is a market that I think has plenty of buyers underneath, so it’ll be interesting to see how this plays out but I think we’ve got a situation where sooner or later somebody will probably try to step in and pick up cheap stocks. The $400 level I think offers quite a bit of support, and in this environment, I just don’t see why you would short this market, at least not yet, unless of course we get headlines over the weekend suggesting that the trade wars are going to get hot again.
To the upside, the $460 level was an area of significant resistance, and I do think that given enough time we will probably try to challenge that. If we can break above there, then the market could go to the $480 level. The 50 day EMA sits at $389 and is rising at this point to get to the $400 level, so I think that will be where significant support is going to show up.
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